Proprietorship Firm Registration
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Proprietorship Firm Registration
Sole Proprietorship firms are one of the most commonly seen business types in our country. With a registration process that defines the very meaning of the word simple, it is no big wonder that entrepreneurs are choosing to pick proprietorship as their choice of business type when they are starting solo.Sole Proprietorship Firm Registration
Sole Proprietorship Firm Registration is Single Person Firm Registration i.e is the main objective is Open Current Bank Account on the Name of Business so it's a simply firm which is enable doing business in India with Less Compliance and Less Costing. a Sole Proprietorship Firm require minimum 2 Legal Entity Proof for open a Current Bank Account.
Sole Proprietorship Firm Registration
Documents Required
for Proprietorship Firm
PAN Card copy of proprietor
Electricity/ Water bill (Business Place)
Copy of Aadhaar Card/Voter identity card
Advantages
Of Proprietorship Firm
Easy to Start
A Proprietorship business needs no registration. Therefore, it is one of the easiest to start with no formalities. However, after starting up the Proprietorship, it is relatively harder to open a bank account or obtain a payment gateway in the name of the business - since more registrations may be required.
Business Name
Since the name of a Proprietorship is not registered, a Proprietorship can choose to have any name - as long as it does not infringe on a registered trademark. However, since the name is not registered, any other person can also use the same business name unless trademark registration is obtained.
Taxation
A Proprietorship with less than Rs. 2 lakhs of income is not required to pay any income tax, as Proprietorships are taxed as the individual owing the business. However, once, income of the business exceeds Rs. 10 lakhs per annum, there are no major advantages for a Proprietorship in terms of taxation.
Frequently Asked Questions (FAQs)
What capital is required to start a Proprietorship?
A proprietorship can be started with any amount of minimum capital.
Who can be a Proprietor?
The Proprietor must be an Indian citizen and a Resident of India.
Will Proprietorship Firm have Certificate of Incorporation?
Proprietorship firms do not have a Certificate of Incorporation.
How can I transfer my Proprietorship?
A business operated by proprietorship firm cannot be transferred to another person, unlike a Limited Liability Proprietorship or a Private Limited Company. Only the assets in the Proprietorship can be transferred to another person through sale. Intangible assets like Government approvals, registrations, etc. cannot be transferred to another person.
Can other people invest in a Proprietorship?
Proprietorship firms are business entity that are owned, managed and controlled by one person. So Proprietorship firms cannot issue shares or have investors.
Do I need one person to start a Proprietorship?
Yes, only one person is required to start a Proprietorship and a Proprietorship can have only one promoter.
Does the proprietor have to be an Indian to start a Proprietorship firm?
The Proprietor must be an Indian citizen and a Resident of India. Non-Resident Indians and Persons of Indian Origin can only invest in a Proprietorship with prior approval of the Government of India.
How to open a bank current account for a Proprietorship?
To open a bank account for a Proprietorship, Reserve Bank of India mandates that the proprietor provide two forms of registration for the Proprietorship along with the PAN Card, identity proof and address proof of the Proprietor. The two forms of registration can be any two of the following: service tax registration, MSME registration, VAT/TIN/CST registration, shop & establishment Act registration, Professional license, Chartered Accountant certificate or others as provided in the RBI Know Your Customer norms.
Will my Proprietorship firm have a separate legal identity?
The PAN card of the Proprietorship as well as the Proprietor is the same. Hence, the firm will not have a separate legal identity. The assets and liabilities for the proprietor and the proprietorship is the same.